According to PwC’s 2025 Holiday Outlook survey, US consumers anticipate a 5% decrease in seasonal spending this year compared to 2024, marking the first significant decline since 2020. The survey reveals that 84% of respondents plan to limit their spending over the next six months, largely due to rising prices, new tariffs, and an increased cost of living. Notably, 36% of those surveyed expect to reduce their clothing purchases, indicating that apparel is likely to be one of the first areas affected by their tightening budgets.
While discounts are important during the holiday season, US shoppers are seeking more than just bargains; they desire a sense of normalcy, value, and brands that resonate with them.
The survey indicates that 53% of consumers expect general price rises to influence their spending decisions this holiday season.
Gen Z consumers, aged 17 to 28, are particularly worried, forecasting a 23% reduction in their holiday budgets—the largest cut across all age groups. This shift suggests that retailers might need to compete more fiercely for a shrinking share of Gen Z’s discretionary spending this season.
In contrast, millennials, Gen X, and baby boomers plan to either maintain or increase their holiday spending, as highlighted by responses from 4,000 consumers surveyed between June 26 and July 9 this year.
Consumers are taking a thoughtful approach to their holiday purchases, weighing what is most important, where to reduce spending, and what purchases are worth splurging on. Brands that acknowledge these consumer preferences and engage shoppers on their terms can cultivate lasting loyalty beyond the festive season, the survey concluded.
Among those concerned about tariffs, 90% are cutting back on spending compared to 75% of other consumers.
Interestingly, Gen Z seeks to balance their budget constraints with a commitment to sustainability and wellness in their purchasing choices. The survey reveals that 63% of this cohort is opting for resale and upcycled products, with one-third indicating they plan to reduce their overall consumption to lessen their environmental footprint.
In addition, 34% of Gen Z respondents (compared to 27% overall) cite sustainability and health as primary considerations when making holiday purchases. This generation is also more likely to read food labels, with 29% doing so, compared to 24% of consumers in other groups.
Traditional factors such as price (49%), free shipping (42%), and promotions (38%) still significantly influence their purchasing behavior.
The survey also highlights a shift in payment preferences, as credit card usage has surged, with 52% indicating it is among their top three payment methods—up from 40% last year.
Cash transactions have increased to 48%, likely as a strategy to avoid fees or adhere to cash budgets, rising from 41% in 2024. Gift cards and prepaid cards are also becoming more popular, with 27% of shoppers saying these are preferred payment methods, marking a 14% increase from the previous year.
Fulfillment options are evolving as well. While 70% of shoppers prefer home delivery, 39% opt for buying online and picking up in-store. Same-day delivery is particularly favored by Gen Z and millennials, with approximately 30% of each group selecting it as their preferred method for receiving online purchases.
